company not vat registered only deal in cash.your opinions

undertaker fan 88

I got onto a supplier of products I would be selling as part of a business I'm in the process of setting up and when enquiring about buying there products they inform me well would you deal in cash as were not vat registered .what should I do as I no this supplier has been in operation here in cork for a long time as a previous employer used them a few Years ago. Any thoughts

jimmii

Just make sure you get a receipt at the time it is up to them how they run their business you can't be held responsible for it. I probably wouldn't be sending them money without receiving goods though!

flyingsnail

Are you sure that they want you to use literal cash and not that they mean they will not give you credit?

undertaker fan 88

No they want me to deal in cash the exact words where we are not vat registered so cash only no cheques or anything .a previous employer never received receipts off them due to this

dbran

Hi

I would see if there are other suppliers available. If they only deal in cash then the chances are the business is not being run in a proper way. This could have effects on quality, delivery etc. You may have difficulty getting a receipt from them which would make the claiming of the expense against profits a little more difficult.

dbran

undertaker fan 88

Ya I am going looking for a new supplier but my problem with him now is on top of being a supplier of this stuff he sells it himself to normal customers on done deal etc cutting out the shop. Is it legal for him to be doing this as potentially he is competition to me over this yet I will be vat registered so losing out

jimmii

undertaker fan 88 wrote: »

Ya I am going looking for a new supplier but my problem with him now is on top of being a supplier of this stuff he sells it himself to normal customers on done deal etc cutting out the shop. Is it legal for him to be doing this as potentially he is competition to me over this yet I will be vat registered so losing out

Nothing wrong with them doing that at all. Are they selling at a price that is impossible to compete with? To be honest sounds like a supplier to avoid. I can't believe that a supplier also selling to the public is under the registration thresholds and the cash request definitely sounds like someone who is trying to take cash to keep the money off the books.

undertaker fan 88

They are selling at a price meaning if I want sell the stuff I need to it wouldn't pay me to as they basically add a euro to the price they sell to say me for which means not much to be made on the product if I want to compete and I agree I'd say cash means pocketing it is there any way tocheck are they above board

_Brian

Could be a few reasons;
They could be dodging the tax man.
As a new customer they may be weary until you prove trustworthy
They may have an overall problem collecting payments, cash is king!


Ask if you'll be getting a proper receipt, if you will be then its up to you to decide if they are a good supplier..

If they are dealing in cash only and not providing receipts then its all a bit dodge and not a sound basis to have suppliers like this.

Graham

undertaker fan 88 wrote: »

They are selling at a price meaning if I want sell the stuff I need to it wouldn't pay me to as they basically add a euro to the price they sell to say me for which means not much to be made on the product if I want to compete and I agree I'd say cash means pocketing it is there any way tocheck are they above board

Find a different supplier or find a different product. Either way, your time would be much better spent concentrating on your business than your suppliers.

jimmii

undertaker fan 88 wrote: »

They are selling at a price meaning if I want sell the stuff I need to it wouldn't pay me to as they basically add a euro to the price they sell to say me for which means not much to be made on the product if I want to compete and I agree I'd say cash means pocketing it is there any way tocheck are they above board

Definitely look elsewhere then the last thing you want is finding the exact product you have considerably cheaper online it just looks bad and they are going to assume its the same across your whole range. We had someone approach us to stock their product they were selling it at €2.50 to the public and wanted to sell it to us at €2 excl. Needless to say we aren't stocking that.

Kensington

undertaker fan 88 wrote: »

No they want me to deal in cash the exact words where we are not vat registered so cash only no cheques or anything .a previous employer never received receipts off them due to this

Sounds like they're trying to avoid any sort of paper or audit trail...

Plus without a receipt what do you do if you end up with faulty or damaged goods supplied from them?

I'd write any potential loss of sales off against saving yourself agro coming at you in the future to be honest.

Bandara

They are essentially your main competitor and one that you cannot beat on price.

A tip off to Revenue of their practices should hopefully see them eliminated and you will be able to source elsewhere without having to sell at zero margins

elastico

Bandara wrote: »

They are essentially your main competitor and one that you cannot beat on price.

A tip off to Revenue of their practices should hopefully see them eliminated and you will be able to source elsewhere without having to sell at zero margins

Just because they want to be paid in cash is not a reason to tip revenue off. Maybe I should report my local publican because he only takes cash and never gives a receipt.

The OP can't compete on price because this company could be buying in huge volume and getting substantial price breaks, or savings on freight etc.

Maybe they just don't want the hassle of their competitor buying off them (thus reducing their own margin) and so tell him cash only as don't want to worry about getting burnt etc.

jimmii

elastico wrote: »

Just because they want to be paid in cash is not a reason to tip revenue off. Maybe I should report my local publican because he only takes cash and never gives a receipt.

The OP can't compete on price because this company could be buying in huge volume and getting substantial price breaks, or savings on freight etc.

Maybe they just don't want the hassle of their competitor buying off them (thus reducing their own margin) and so tell him cash only as don't want to worry about getting burnt etc.

It is a bit strange for B2B to want to get paid cash and tipping off revenue just means that if they are doing nothing wrong then there won't be any problem. If they don't want the hassle of supplying other companies then they probably shouldn't become a supplier! Maybe OP did something to make them not want to deal with them but obviously we won't know that.

Bandara

elastico wrote: »

Just because they want to be paid in cash is not a reason to tip revenue off. Maybe I should report my local publican because he only takes cash and never gives a receipt.

The OP can't compete on price because this company could be buying in huge volume and getting substantial price breaks, or savings on freight etc.

Maybe they just don't want the hassle of their competitor buying off them (thus reducing their own margin) and so tell him cash only as don't want to worry about getting burnt etc.

Your local publican is under no legal obligation to provide a receipt

A company is obliged to collect the correct vat and other duties on behalf of the state, dealing in cash with no invoices would hardly be the action of a company acting correctly.

And as Jimmi has said, if they have done nothing wrong then revenue looking into then will not be of any concern

barneystinson

elastico wrote: »

Just because they want to be paid in cash is not a reason to tip revenue off. Maybe I should report my local publican because he only takes cash and never gives a receipt.

The OP can't compete on price because this company could be buying in huge volume and getting substantial price breaks, or savings on freight etc.

Maybe they just don't want the hassle of their competitor buying off them (thus reducing their own margin) and so tell him cash only as don't want to worry about getting burnt etc.

If you look at the OP it states that they insist on dealing in cash as they aren't VAT registered. That's a pretty good reason to tip off Revenue.

elastico

barneystinson wrote: »

If you look at the OP it states that they insist on dealing in cash as they aren't VAT registered. That's a pretty good reason to tip off Revenue.

Why?

They are under no obiligation to register for VAT if they are under the threshold/

If they only want to accept cash that's their choice, better than being stung with dud cheques and chasing customers for months over payments.

jimmii

elastico wrote: »

Why?

They are under no obiligation to register for VAT if they are under the threshold/

If they only want to accept cash that's their choice, better than being stung with dud cheques and chasing customers for months over payments.

There definitely may be other reasons for looking for cash instead of cheque or card but one of those reasons would be to keep things off the books I don't think anyone can deny that it is a possibility not that I am saying it is in this case. If they are doing nothing wrong contacting the Revenue won't really matter in the long run any way.

barneystinson

elastico wrote: »

Why?

They are under no obiligation to register for VAT if they are under the threshold/

If they only want to accept cash that's their choice, better than being stung with dud cheques and chasing customers for months over payments.

Context is everything. If you take the OP at face value, they want to deal in cash BECAUSE they aren't VAT registered, that is clearly an issue. There's only one reason a trader would want to deal in cash BECAUSE of not being VAT registered, and that is that they should be VAT registered.

Anyway, according to the OP this is an established supplier who used to supply products to their former employer. There are very few businesses selling products, to business and retail, that could survive in business while genuinely turning over less than the VAT threshold. It's very strange that you'd assume they are under the threshold, rather than the more likely scenario.

Bottom line here is if the OP tells Revenue what they've told Boardsies, they can quickly look to see if the business is VAT registered - if it is, they will probably bin the report, and if its not they can tackle it.

uck51js9zml2yt

You could check the cro website to see when they last made returns.
Its not unusual in the current climate to want cash. I know of several busnisses who took cheques which bounced.

undertaker fan 88

My main problem wasn't them wanting cash but the not vat registered and selling to the public at wholesale prices which basically stops the need for me and its wrong

pedronomix

What a lot of fluff in this thread. They sell to you at essentially the same price that they sell to the market. You buy from them, then we know who the patsy is here. Find a proper supplier or business, simples.

elastico

undertaker fan 88 wrote: »

My main problem wasn't them wanting cash but the not vat registered and selling to the public at wholesale prices which basically stops the need for me and its wrong

There is nothing wrong with selling to public and not being VAT registered.

barneystinson

elastico wrote: »

There is nothing wrong with selling to public and not being VAT registered.

Ahem... you've neatly ignored my post. The OP has clearly stated they told him they want to deal in cash BECAUSE they're not VAT registered...???

He's also said they supply to businesses, as they previously supplied a former employer of the OP's... can you explain how a trader can absorb their input VAT and sell without VAT to other businesses..?? There couldn't be a margin in it, as they'd be competing with VAT registered suppliers who can deduct their input VAT and sell for a lower price...

jimmii

elastico wrote: »

There is nothing wrong with selling to public and not being VAT registered.

Nothing wrong with it but hard to imagine someone is a supplier and selling to the public themselves and are not meeting the threshold at which VAT registration is mandatory.

Greenmachine

What kind of products are we talking about here. If 90% of what you are selling is 0% rated then there is no need to register for VAT. You can check the product against the appropriate tax band, by cross referencing the tarec code with the revenue.

elastico

barneystinson wrote: »

Ahem... you've neatly ignored my post. The OP has clearly stated they told him they want to deal in cash BECAUSE they're not VAT registered...???

He's also said they supply to businesses, as they previously supplied a former employer of the OP's... can you explain how a trader can absorb their input VAT and sell without VAT to other businesses..?? There couldn't be a margin in it, as they'd be competing with VAT registered suppliers who can deduct their input VAT and sell for a lower price...

Not sure what your point is bringing up the supplier not being VAT registered etc.

If you read post #22 (slowly now) the OP's main issue is his competitor sells to the public at wholesale prices (nothing wrong with that) and this cuts him (the middleman) out of the deal and he thinks this is wrong, which its not.

As regards VAT we could be talking about a sideline business here, 1000 Ipad cases or whatever.

Banging on about VAT, cash and tipping off revenue is irrelevant unless we know the scale of the operation.

mneylon

Whether they're VAT registered or not shouldn't be an issue.
If they're not VAT registered they simply cannot charge you VAT
However they should be able to give you a receipt or invoice.

If they refuse to give you a receipt or invoice then there's definitely something odd going on.

Interestingly retailers, like your local shop or publican, apparently aren't obliged to provide receipts. I suspect that's a peculiarity of Irish law. In Italy, for example, they are obliged to and you can get stopped outside bars by tax inspectors doing random checks.